Lookers reports 8% revenue rise as takeover bid from Global Auto progresses

The AM100's third-largest car dealer group, Lookers, has revealed its first half 2023 trading secured 8% higher revenues year-on-year as it prepares for shareholders to decide whether to back a £504m takeover bid by Global Auto Holdings.

Turnover was up to £2.42 billion in H1, while profit before tax dropped to £40.4 million (2022: £49.9m). Underlying profit before tax, which excludes one-off costs such as advisory services associated with the ongoing takeover offer and sale and leaseback profits in 2022, was down 2.3% at £46.1m (2022: £47.2m).

Chief executive Mark Raban said: "The first half result is strong considering both the uplift in the Bank of England base rates which have materially increased finance costs, and the continued inflationary pressures on our cost bases across the business."

Lookers' net finance costs have risen from £11.6m in H1 2022 to £18.3m in H1 2023, driven by the 14 Bank of England base rate interest increases.

Revenue on a like-for-like basis was 8.5% up, with increases in fleet, used vehicles and aftersales helping to offset a fall in retail new vehicle revenue.

Having closed six sites in 2022, another has been closed in H1 2023. However it has opened GWM Ora sites at Wolverhampton, Belfast and Braintree, and it has agreed to open three showrooms with Electric Brands to showcase the XBUS and Evetta brands.

Lookers is implementing a sales transformation strategy, which will streamline the customer journey and provide omnichannel choice.

Raban said there is a "strong new vehicle order bank moving into the second half of 2023" but macroeconomic aind inflationary pressures continue."

Lookers accounts show inventories worth £683.9m at June 30, a 39.5% increase on the same point in 2022, and its investment in rental fleet vehicles has increased 32%.

"The board continues to believe that our business model and the advancement of our strategic priorities place the group at the forefront of integrated automotive retail in the UK."

And he reiterated that Lookers' board believes that accepting the 130p per share offer from Global Auto Holdings is in the best interests of all shareholders.

After major shareholder Cinch rejected an initial Lookers takeover offer from Global Auto Holdings, which is headed Kuldeep Billan, founder and executive chairman of Canada's Alpha Automotive Group, the offer was increased.